IBM Stock Gains on Ustream Acquisition

NEW YORK (TheStreet) -- International Business Machines (IBM) stock is up by 1.41% to $123.58 in late morning trading on Thursday after the technology company announced it was buying video streaming service Ustream. 

IBM announced on Thursday that it will acquire Ustream, a San Francisco-based service that has more than 80 million viewers and broadcasters. Ustream will join IBM's new Cloud Video Services unit.

The acquisition will allow IBM Cloud customers to improve their video, digital media and data asset capabilities, IBM said in a statement today.

The cloud-based video services and software market is an $105 billion market opportunity, the company added.  

"Video has become a first-class data type in business that requires accelerated performance and powerful analytics that allows clients to extract meaningful insights," Robert LeBlanc, IBM Cloud's senior VP, said in a statement. "Aligning our expansive video and cloud innovations into an integrated unit will create opportunities for clients to take advantage of this medium in the most strategic way possible."

IBM purchased Ustream for $130 million in cash, Fortune reports. The entire deal was said to be valued at about $150 million, which includes employee retention payments and earn-outs.

Separately, TheStreet Ratings team rates IBM as a "hold" with a ratings score of C+.

IBM's strengths such as its increase in net income, good cash flow from operations and expanding profit margins are countered by weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and feeble growth in the company's earnings per share.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

You can view the full analysis from the report here: IBM

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